Tanzania new oil bulk system hurting Zanzibar

Tanzania new oil bulk system hurting Zanzibar

Sunday, 04 March 2012 20:16 Kenan Kalagho

DAR ES SALAAM, TANZANIA - The new bulk oil procurement system that was introduced by the government of Tanzania with an aim of cutting the number of importers and curbing price fluctuations, has led to insufficient oil supply to Zanzibar.
Speaking in Dar es Salaam last week, the Chairman of the Board of Directors of the Petroleum Importation Coordinator (PIC), Mr Shanif Mansoor, said he had received complaints from the government of Zanzibar regarding the new system that has been denying the country access to petroleum products.
Under the new system, a firm that wins the bidding process is required to import a specific amount of oil which usually lasts two to three months.
“This gives a vessel to load a specific needed consignment of oil without any surplus,” Mansoor 
said.
(Minister Ngeleja stressing apoint during the meeting. Photo By Kenan Kalagho)
He said it was now hard for the government of Zanzibar to access oil under the new system.
“The government of Zanzibar used to buy the surplus from traders, but this time the vessels coming into the country carry specific tons of oil consignment as per the agreement with the firm that wins the oil importation contract,” says Ngeleja adding “This is denying Zanzibar access to fuel.”
Mansoor noted that under the new system the government was much assured of the oil imports in the country due to the  agreements made with the oil importation firm. 
Currently Tanzania has off loaded a total of 453,606.94 metric tonnes of oil at the Dar es salaam port following the first tender which was won by a Swiss oil marketing firm, Augusta Energy of Geneva, to import 530,000 metric tonnes of oil worth $500m (about Shs850billion).
Mansoor said there were still three vessels waiting to offload the remaining 100,000 metric tonnes of oil at the Dar port in-order to attain a total of 530,000 metric tonnes from the first tender consignment.
He said some of the achievements of the bulk procurement system were stability of fuel prices in the country, and the reduction of demurrage which has now stood at USD $5 a day instead of $30 a day that was previously being incurred.
The Energy and Minerals Minister, Mr William Ngeleja, said it was important that the government installed the mechanism like PIC to regulate oil importation in the country as petroleum plays an important role in the economy of Tanzania.
The Petroleum Importation Coordinator (PIC) was established in September 2010 under the  Petroleum Act with an aim of coordinating all issues pertaining to the bulk procurement of oil.